Comprehensive Income Assume that you are the accountant for Ellis Corporation, which has issued its 2010 annual

Question:

Comprehensive Income Assume that you are the accountant for Ellis Corporation, which has issued its 2010 annual report. You have received an inquiry from a stockholder who has questions about several items in the annual report, including why Ellis has not shown certain transactions on the income statement. In particular, Ellis’s 2010 revealed two accounts in Stockholders’ Equity (Unrealized Gain/Loss—Available-for-Sale Securities and Loss on Foreign Currency Translation Adjustments) for which the dollar amounts involved were not reported on the income statement.

Required
Draft a written response to the stockholder’s inquiry that explains the nature of the two accounts and the reason the amounts involved were not recorded on the 2010 income statement. Do you think that the concept of comprehensive income would be useful to explain the impact of all events for Ellis Corporation? Why or why not?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...